Staying compliant with ROC regulations is crucial, and recent adjudications highlight key areas where companies can slip up.
In one such order, Penalty was imposed on the Auditor of a Company on failure to comment about the following in Audit Report:
- AS 18: Shareholders holding > 20% of the voting power, not disclosed as Related Party in Financial Statements.
- Dues of Micro and Small Enterprises: Co. has shown amount as ‘Due to Others’ under ‘Trade Payables’ without stating whether they are dues of Micro and Small Enterprises or otherwise.
- Nature of Advances: Co. has shown amount as ‘Other Advances’ under ‘Short- Term loans and advances’ without specifying nature of such advances as required under the provisions of Schedule III.
- Additional Info in Notes regarding Aggregate Expenditure and Income: Any item of
expenditure which exceeds one percent of the revenue from operations or `Rs. 1,00,000, whichever is higher, needs to be disclosed separately. Co. failed to give additional info about interest expense and other income and expenditure item exceeding the above limits.
Staying compliant is key to avoiding penalties and reputational damage. Ensuring your company has robust processes in place to address these areas is of utmost importance!
Here are few other violations from recent ROC orders, categorized for easy reference:
